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Baltimore Losing its Fight Against Wells Fargo

Anthony Randazzo
September 20, 2010, 6:44pm

In the aftermath of the financial crisis, everyone is trying to blame the banks. Treasury is trying to force banks to buy back toxic mortgages that they sold to Fannie Mae and Freddie Mac. And cities have been trying to blame their problems on the banks. But these efforts to avoid responsibility aren't going so well. Baltimore is the most recent example. From National Mortgage News:

Baltimore has suffered another setback in its case against Wells Fargo & Co. in which it argues that the bank's lending practices led to foreclosures that have hurt the city.

A U.S. district judge dismissed the suit a second time earlier this week, questioning whether the properties could have become vacant in any event or if the borrowers defaulted on the loans specifically as a result of the Wells Fargo mortgages that were made. The judge left open the possibility that Baltimore could re-file by Oct. 22 after conducting further research. [...]

Other cities have tried their hand at pinning the blame on banks for their economic troubles. In 2008, Cleveland filed a public nuisance lawsuit against several of the nation's biggest banks for creating blight. Birmingham, Ala., like Baltimore, filed a suit claiming banks caused a foreclosure epidemic by violating the Fair Housing Act. Both cases were dismissed last year. Cleveland later appealed the ruling, but was unsuccessful.

The first time around, the judge dismissed the Baltimore case arguing that the cities troubles weren't because of predatory lending, but instead a result of "extensive unemployment, lack of educational opportunity and choice, irresponsible parenting, disrespect for the law, widespread drug use and violence.

See the whole story here.


Anthony Randazzo is Director of Economic Research


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